Articles of Interest

Some Tips on How to Select a CFD Trade

As every CFD trader knows choosing a trade is not always the easiest task there are CFDs on thousands of shares to choose from but which ones do you trade? Most traders follow a particular style of trading and choose their CFDs based on certain criteria such as liquidity and price, however not all traders have a trading plan but rather base their investment on factors such as dividend returns or company valuations. Even if you don’t have a trading strategy there are a few important factors that you should consider when choosing which CFD to trade online, a few of these factors are outlined below.
 
Seasonality
With thousands of share CFDs to choose from one factor most people overlook when they start trading is share CFD price seasonality, this is one of the most obvious factors influencing share CFD prices. If it is summer you should consider CFDs which historically have price moves up during this season or price moves down if you are bearish, examples of seasonal stocks include retailers.
 
Technical Analysis
There are thousands of indicators available with the most common ones being MACD, volume, moving averages, RSI, CCI, stochastics and bollinger bands. Don’t get confused by the many thousands of indicators available, keep it simple in the beginning. Using too many indicators can be confusing and result in mixed signals, you should start by using one or two simple indicators first like MACD and moving averages for example, once you are accustomed with these indicators only then should you start experimenting others. Some of the most successful traders solely rely on technical analysis however when starting out it is advisable not to solely rely on technical analysis alone when making your trading decisions.
 
Company Fundamentals
Most people overlook company fundamentals when choosing a CFD to trade. One of the most important aspects in choosing a share CFD is the company’s balance sheet and profitability, reading over the company’s balance sheet is essential before making medium to long term investment, of course if you intend to engage in short term trades this is less important.
 
Company Management
Company management is something most CFD traders fail to consider. Investing in companies who’s management have a good track record is always a good start. Of course management is more important to consider for medium to long term traders, and less important for short term investors looking to take advantage of short term price fluctuations.
 
Global Market Conditions
It is important to monitor global market conditions as market movements are ultimately dictated by the global economic climate. Currencies, commodity prices and global indices all have an influence on the local stock market and ultimately you CFD positions.
 
Of course these are just some of the factors CFD traders should consider when entering into a CFD position. Every trader enters into CFD positions using different criteria that suits their risk profile and trading habits, it is always important develop your own trading plan to site your risk profile and lifestyle.

To find out more about CFD trading you should take a look at this free CFD guide.


Recent Posts


Tags

CFD Pairs Trading Scalping Trading Profits Technical Analysis Company Fundamentals Market Depth Initial margin WebIRESS Help IOS Classic Trading Plan Trading Styles CFD Scalping cfd trading platform CFD Risks CHESS Trend trading CFD financing charges Wbeiress Java Fixed Spread Broker CFD leverage Webiress watchlists Meta Stock Sniper ICM Hedge Webiress Demo Liquidity Trust account CFD risk Share CFD webiress charts WebIRESS Errors Stop-loss orders CFD Volatility Best CFD Provider DMA CFD If done order MT4 Trading Seasonality CFD margins dow jones charts DMA Forex Pairs Opening Price Auction Currency Trading Take profit order CFD order types CFD Trade Size Share CFDs WebIRESS Error Market Scanning Software Settlement CFD Franking Credits swing trading ProDeal Trading Platform Trading Edge Financing webiress CFD Trading Benefits WebIRESS Advantages Short Selling Shares Spark Intraday trading Tight Forex Spreads Loss aversion Index CFD International Capital Markets Over The Counter CFD liquidity CFD Risks: Risk Management CFD Trading Mistakes CFD Trade Selection Risk Managment Portfolio Diversification Realised Profits Direct Markets Access Pairs Trade Shortselling CFDs S&P 500 Company Management ASX CFD Exchange Order Book ECN Broker Metatrader4 cfd instruments CFD Day Trading dma cfds webiress Share Settlement CFD Provider Review Trading Lifestyle Dividends CFD portfolio Trading Mistakes Issuer sponsored Small Cap CFDs, Speculative CFDs Stop-loss Market Makers Transaction cost Trustee WebIRESS Firewall CFD Costs chart patterns Automated Trading Forex Broker Stock split Direct Market Access CFDs MQL4 Webiress Review Trading Strategy Unrealised Profits CFD Traders Edge Margin Trading Trading on the open CFDs online Trading Benefits Day Trader Portfolio Managment Company Profitability CFD position liquidation Metatrader Demo Risks of CFDs Trade Excecution CFD trading system Sector CFD Trading Habits IOS Plus CFD Margin Rates Trading Strategy Commission Free Market Auction Company Balance Sheet WebIRESS Java indice Trading Psychology Tight Spreads ATO ID 2007/56 CFD Dividends Variation margin Currency CFD trading strategy Webiress MDI CFD provider Overconfidence CFD Broker Tax Ruling CFD liquidation Webiress Cost Short Selling sector Best CFD Broker short oco order stop out level reuters news requote CFD financing Trading stratery Online Trading Underlying Exchange CFD trading style CFD GST Trading Currencies Trading timeframes Expert Advisors Scalper CFD brokerage margin rates HIN Directional Trading Metaquotes Market order EAS CFD price end-of day trading Margin Calculation Take Profit CFD Parcel Closing Price Auction Match Phase CFD Income Information Flow CFD Commission trading platform Forex Liquidity WebIRESS Problem Margin Lending Shares Trusts CFDs Trust account CFDs Foreign Exchange Broker sponsored GST Shares Webiress Market Map Equites zone trading Stock Transfer webiress trading platfrom ProDeal Platform ATO Trading Style Pro Deal Platfrom DMA CFDs Trading fear Forex Metatrader CFD benefits Volatility CFD Profits Order Book Market Maker Global Market Conditions Stop-loss order Forex DMA webiress plus Trading on the match Forex ECN Low CFD Margin Rates Share split Short CFDs Investing Charting Package Spreads OTC SMSF Forex Spreads Psychology CFD Scalper Pro Deal Trading Platfrom Virtual Private Server Market Map Low CFD Margins CFD Sniper Leverage TR-2005/15 Metatrader Broker ASX CFDs Self Managed Superfund HIN Transfer Hedge Book CFD Edge CFD Trading Edge CFD Day Trader CFD order ECN Trust Settler IC Markets CFD margin International CFDs DMA Trading Capital ASX 200 Margin Loans Lowest CFD Margins Trading emotion Direct Market Access long VPS Share trading WebIRESS Problems Real-time Margining Forex Robots Tax Spread Betting Stop loss order Day trading CFD trading Guaranteed Stop-loss webiress platform Options Forex Trading Day Trader Psychology Currencies Prime Broker DMA CFD Provider Limit order global cfds Margin call end of day trading Webiress workspace news trading Trust Deed CFDs Pro Deal Price Feed Pre Borrow CFD Providers webiress cfds ProDeal Hedging EA Online Share Trading Day Trading DMA CFDs CFD Trade Management intra-day trading Managing Risk Electronic Communications Network ATO ID 2007/57 Contracts for Difference index Best Metatrader Broker Risk diversification CFD Dealer Fixed Spreads trailing stop-loss Money Management Cash Flow IOS Technical Ananlysis What is a CFD

Archive